Intervju med VD på Beyond Frames

TradeVenue har inlett ett samarbete med bevakning av bolaget Beyond Frames Entertainment och som en del av detta har jag fått chansen att titta lite närmare på bolaget. Beyond Frames är verksamma inom AR/VR och aktien är listad på Spotlight Stockmarket. Det betyder att den går att handla precis som vilken aktie som helst via exempelvis Avanza och Nordnet . Bolaget har drygt 3 000 ägare på Avanza och Nordnet och ett börsvärde på cirka 400 miljoner SEK.

Aktien har gått urstarkt under början av 2023 med en uppgång på en bra bit över 100% sedan årsskiftet.

Vi kommer titta närmare på bolaget i två inlägg de kommande veckorna. I detta första inlägg kommer vi få höra mer om aktuell status från bolaget VD Ace St Germain, med utgångspunkt från den nyligen publicerade Q1 rapporten.

I nästa inlägg blir det mer fokus på marknaden i stort och vad som händer inom VR för närvarande. Både exempelvis Meta och Apple har gått ut med stora nyheter inom segmentet så det är helt klart i ropet.

Men vi börjar med att titta lite mer på Beyond Frames specifikt och Q1-rapporten. Intervjun är som ni ser på engelska då Ace inte pratar svenska. Hoppas ni kommer tycka det är intressant och lärorikt och att ni kanske får upp ögonen för ett nytt bolag! Och i kommande inlägg är förhoppningen att vi dessutom kan lära oss ännu mer om branchen i stort. Nu kör vi!

Thank you Ace for your time to help us understand Beyond Frames and your business a little bit better. Can you tell us a bit about yourself and what you have done before you became CEO of Beyond Frames about a year ago?

Thanks for taking the time to introduce us to your audience.

Before Beyond Frames, I spent nearly 2 decades in games, media, entertainment, and tech. Most notably, I was the Publisher of PC Gamer for Future Publishing in the US, ran the content programming strategy at a Warner Bros. and AT&T joint venture called Ellation, and made my way to Amazon’s Twitch as the Head of Programming for the content organization. In between, I ran a boutique consultancy servicing gaming companies like Nintendo, Ubisoft, and others.

What have been your main goals and focus for the company in the first year as CEO?

There were 2 main things:

First, adding more product-mindedness into our culture. The talent here was great at building and publishing games, but the XR space presented unique challenges, and we needed more focus on how to build and distribute games in this niche market. We’ve since changed our approach and are now adding titles to our development and publishing slate that sit far outside of our original DNA, but squarely within what we’ve determined is the right target market for commercial success.

Second, establishing more efficiency in all aspects of the business. Specifically, efficiency through partnerships. Partnerships with XR platform owners, partnerships with big IP rights holders, partnerships with funding parties, and partnerships with studios. We already had world-class production capabilities, but we needed more control over how we funded, distributed, and marketed games. By establishing these partnerships we’ve been able to subsidize both our studio and publishing pipelines while putting some incredibly exciting intellectual properties into future releases.

Beyond Frames delivered a strong Q1 report in May with a 110% revenue increase compared to Q1 last year. Can you tell us more about the main drivers behind this growth?

Our publishing business was the biggest driver. We launched 4 games in Q1, 2 of which broke top sales lists across multiple digital distributors. Up until Q1 of 2023, we published an average of 1 game per year, but the newly established speed in our publishing pipeline allowed us to put together a strong portfolio leading to the healthiest sales we’ve ever seen in a single quarter.

Can you tell us the basics of your business model? For example, we could read in a press release after the Q1 report that you have signed a partner deal with a partner who takes all developing costs for a new game. How does a deal like that work?

We have 2 main businesses today:

1. The studio business, which are games made by our owned and operated studios and published in-house. We generally take 100% of the revenues earned on sales of our owned studio titles. We also usually take on 100% of the risk.
2. The publishing business, which mainly consists of games made by partner studios that we distribute and market. Under our publishing model, we recognize 100% of revenues on our top line and provide a revenue share to the partner studio based on our relative investment into their game.

For the specific deal you’ve mentioned, an external publishing partner is taking on all the cost of a new game created by one of our owned studios, Cortopia. In this case, the publishing partner will get a revenue share from the sale of game units, but we take on much less risk. This is the first time we’re doing anything like this, but it made sense, given the budget size of the game and the familiarity the publisher has with the game’s IP.

Moving forward, we will continue to look at ways to subsidize the development and marketing costs of our owned and partnered initiatives so we can keep putting great products on the market at reduced risk and improved probability of success.

What do you advise my readers and investors to pay some extra attention to in the numbers in the next few quarterly reports? Is your top priority to continue the strong growth in revenue or is it something else that is more important in the next few quarters?

Continued growth of our revenues is a strong sign of market health and our ability to earn more market share in this growing gaming segment over time. I’d like to emphasize this is the hardest metric to grow in XR and we would like to do it safely. We are looking to manage our EBITDA and cash flow, but cost and cash spend are easier for us to control.

You said in the Q1 report that your studios are currently at full capacity. Is that 100% good news or could it be a problem to achieve organic growth based on that? What can you tell us about your strategy going forward regarding acquisitions of new studios or developing your three existing ones?

Our owned studios being at full capacity is a good problem to have. We want to keep opening up new capacity and putting more products on the market. That said, we want to scale efficiently. Our plan is to continue securing external funding to support hiring for our existing studios, but we have the resources to do so without external support if needed.

We are open to growing through acquisitions, we use publishing as the first phase of our pipeline. If a studio we work with demonstrates sound judgment toward making games and is a good fit for us in culture and product thinking, we’ll move to establish a longer-term relationship.

Generally speaking, we believe it’s all good news.

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Med det tackar vi Ace för denna gång. Läs mer om Beyond Frames här på TradeVenue.